UNEP’s ‘Adapt to Survive’ report argues that, in the face of unprecedented global environmental challenges, business transformation to a Nature Positive approach is both critical and possible. The report lays out the technocractic, enlightened self-interest argument brilliantly. But it doesn’t mention the political realities of transformation, or that success is far from inevitable.
This post is part of the #ReadingNotes series, see here for more (including format and use of bulletpoints).
- The scale of global environmental challenges is unprecedented
- Business transformation is critical and possible
- Shifting towards a Nature Positive approach is the best way for business to transform.
Business at a time of transformation.
- Human beings are already putting people’s survival at risk.
- For businesses locked into linear, fossil-fuel-based practices, the inevitable transformative change towards a positive relationship with nature poses existential challenges.
- To navigate and survive the coming decades of transformative change, every business will need to harness all the ingenuity, creativity and imagination they can muster.
The scale and pace of environmental change is unprecedented
- Business leaders know that their success depends on healthy people, resilient societies, productive natural systems and a stable climate, yet all of these are now under threat.
- Climate. To avoid the most dramatic of these impacts, global greenhouse gas (GHG) emissions will need to fall by half by 2030 and reach ‘net-zero’ by 2050, or equivalent to achieving each year to 2050 the ~8 per cent emission reductions caused by the global COVID ‘lock down’.
- Global food system. The world will need 50 per cent more food in 2050 to feed the nearly 10 billion people, while reducing the environmental impact of food production by about two-thirds.
- Production. Linear ‘take, make, waste’ economic system extracts natural resources and produces waste at rates that are not sustainable. A near-wholly circular economy by 2050.
- Transformative changes to reduce carbon emissions and loss of biodiversity between 2020 and 2050 could have significant positive impacts on the global economy and human health, saving about US$54.1 trillion.
The global economic system is locked into a pattern of environmental damage
- Avoiding this environmental damage and its dramatic consequences requires something fundamentally different from incremental reductions in emissions and biodiversity loss.
- Moving the economy out of this locked-in pathway requires deep transformative changes in how the economy has been collectively organized.
- For businesses operating in such end-of-life contexts, shifting to completely new business models that are based on different types of resources, technologies, value propositions and market structures is further complicated by ‘sunk’ investments in equipment, personnel and assets, as well legal and collaborative commitments towards providers, partners or buyers.
- Understanding change better.
- Transformative change can be driven by:
- Technological change (eg horses to cars).
- Institutional and economic change, leading to societal shifts (eg from neighborhood to specialized health care)
- Such transformations can take decades, but usually 10-15 years of disruptive and chaotic structural change plays out before a new normal is reached.
Figure 4: How transformative change is always about build-up and break-down
- Transformative change can be driven by:
- Incremental change: path-dependent sectors adapt in the short term by improving their efficiency but, as a result, decrease their diversity and long-term adaptive capacities
- Transformative change: a non-linear shift away from current configuration, triggered by crises and events that catalyse and accelerate reorganization of complex social systems.
Figure 5: Different policy approaches produce different result
Emerging key sustainability transitions
- There is evidence of sustainability transitions emerging in: food production; energy generation; mobility; and, resource use.
- On circular economy (“an industrial system that is restorative by design”) we are shifting to a system where we:
- Design out waste and pollution.
- Keep product and materials in use.
- Regenerate natural systems
- In self-reinforcing feedback loops.
- The ‘new energy’ transition is driven by an ever-intensifying focus on deep decarbonization, and the exponential growth of renewables that between them threaten current fossil fuel investments, future profits and existing business models as well as centralized control of energy system.
Towards a Nature Positive Economy
- These emerging sustainability transitions all help business break away from a locked-in, linear, extractive and fossil-fuel-based economy towards a future economy that creates value for nature and people
- This model is referred to as a Nature Positive Economy: an economy that is regenerative, collaborative and where growth is only valued where it contributes to social progress and environmental protection
- The nature positive economy tries to capture the core ideas of planetary boundaries, doughnut economics, the well-being economy, the circular economy, the sharing economy and the biobased economy, to name a few.
- In energy, food, mobility and resource use, there are already technologies, business models and markets emerging that operate this way.
- These business models are:
- Regenerative: seeking to contribute to creating positive impact for nature and people and to help address persistent ecological and social challenges in order to be profitable.
- Collaborative: based on cooperation with diverse groups of stakeholders, to create social and ecological value.
- Shared value creation: often, such as community or public goods and services.
- Transformative: helping to shift context (policy); inspire new products, models and practices (business); improve awareness, understanding and impact (research); and change demand, preferences and ownership (consumers).
- Translocal: globally connected through technology and markets and locally rooted in community and context.
- This global push for sustainability transitions creates an enabling business environment for new types of entrepreneurship: for purpose-driven businesses that are committed to delivering positive impact for societal challenges.
- For those that fail to adapt, survival is at stake.
How to reach this new future
- Three key underlying mechanisms:
- Build-up: actions that help develop, professionalize, scale and institutionalize nature positive transformative innovations, technologies and business models to the level of society, markets, organizations and regions.
- Change and adapt: actions that lead to adaptation, adjustment and realignment of existing business models, regulations, instruments and conditions to accommodate this transformative change.
- Phase-out: Actions that anticipate phase out of certain technologies, market collapse and disappearing practices, changing consumer preferences and institutional conditions inherent to transformative change.
- Failing to create an individual transformative pathway risks the business’s future. There is no long-term basis for business that operates at the expense of nature and people.
How to make business thrive
Each company’s journey to become nature positive will be different. Here are some basic steps and questions that will start any business on that journey.
- Understand the baseline.
- The realism of current performance across the range of issues will enable a company to evaluate how viable its business model is in relation to the expected transformations in its sector and markets.
- Explore key risks and opportunities relating to strategic and operational decisions.
- Set a nature-focused purpose and strategy
- Business leaders must review their core business assumptions and ask: ‘are the natural and social systems upon which raw materials, talent and capital rely are healthy and resilient, and how can we strengthen them?’
- A company’s purpose needs to reflect its unique contribution to delivering a nature positive outcome.
- Establish nature-focused goals and report on performance.
- Adopting and delivering a nature positive business strategy, where human and environmental well-being are integral to business, requires meaningful, context- and science-based targets and goals to focus efforts and measure progress
- Context-based goals should result in a shift from short-term, purely financially driven metrics to those that measure the quality and the environmental sustainability of business growth
- Disrupt business from within
- Many of the nature positive, disruptive business models and shifts with the potential to reshape industries are already here.
- Most businesses need time to adapt to new regulations and consumer trends and to commercialize new models and solutions. It is therefore best to create space internally to explore alternative, nature positive futures beyond the existing business models as a way to anticipate future disruptions.
- Find new partners
- No single business, acting alone, can drive these transformations, but business action plays a critical role alongside policy, markets and society
- More and more companies are mobilizing support for some of the policies mentioned above by calling on national governments to set a clear direction of net-zero emissions by mid-century to help them speed up the pace of investment, innovation and change.
- Change the definition of success
- Leaders must now widen their measures of success and develop partnerships to include outcomes aligned with the health and well-being of people and nature.
The journey is as important as the destination
- Transformational change doesn’t happen overnight, and, as with any long journey, flexibility and patience will be crucial.
- Business leaders can expect to be called mavericks. But ‘perseverance’ might be the descriptor that you strive for internally. and eventually you will be called ‘pioneer’.
- Humanity is on this journey together because it is the current generation’s ‘moon shot,’ the defining moment, for many living today and for all future generations.
- The key messages and the thrust of the report. Strong on need for beyond incremental.
- Very good summary and refreshed version of the case for sustainable business.
Health as framing
- The health/wellbeing framing for sustainability arguments existed before COVID. But their use in the report implies this framing is on the rise.
Nature-positive as framing
- First big use of ‘nature-positive’ or ‘nature-aligned’ that I am aware of.
- Seems like a combination of:
- The method of ‘biomimicry’: using nature as example or inspiration.
- The philosophy of deep green: since humanity is part of nature (not separate), we can only flourish if we act as part of nature.
- Very much like this way of expressing a new mode available to configuring, whether as a private business or other organisation.
- Today’s digital technologies mean an organisation can be locally-grounded and also have a global reach, or least globally distributed touch points.
- As Kranzberg’s first law of technology has it, this is neither good nor bad nor neutral. But it is a feature, a field of possibility, for how we organise into the future.
Where is the politics?
- The report rightly identifies that many incumbent businesses face an existential challenge from environmental sustainability.
- One response is to innovate, as the report argues for.
- But is that the easiest thing to do? Is it what businesses have done historically?
- The answer to both questions is no. It is easier to use incumbent political power to slow down the economic and social forces of change.
- That’s what we have seen with Big Oil, as one of many examples.
- The report presents the rational, technocratic and enlightened self-interest case for long-term transformation. But there is also a rational, technocratic case for short-term self-preservation – as well as a visceral, personal case for it too. Even if that has a medium-term legacy of a failing company in a struggling world, business leaders have often chosen improving within the status quo over attempting transformation.
- All of which means there is a big gap on the politics and power. Here are just some of the questions that are not addressed:
- Realistically, how will the incumbent players who do not want to transform, or who cannot, act? What should business leaders committed to transform do about that?
- Can such non-linear shifts happen without political pressure from citizens, through movements which are outside business?
- What is the role of government in creating the conditions for urgent and deep transformation?
- Presumably this was ruled out of scope for the authors. It is a UN report after all. But it is a big gap.
Is successful transformation really inevitable, and the momentum already here?
- A key part of the rhetoric is that not only are the changes in the natural world already happening, but the ‘nature-positive’ movement is also rising. The report is effectively asserting that Nature Positive is inevitable. Either join in (and win) or ignore (and lose).
- The last section in particular is trying to stoke a fear of missing out, by saying you will start as mavericks but you will end up hailed as pioneers.
- This is a similar flywheel as the people behind the Paris Agreement tried to create: the commitment drives action, which drives some success, which people want to join in with, which drives more commitment. The more inevitable it looks, the more it will succeed. Therefore, the more people believe in the inevitability, the more likely it is to succeed.
- Therefore, to question whether the rhetoric is accurate is also to put at risk its success.
- But still i think it is worth questioning whether it is true. Because, if it is not, then we need to be preparing for the various different sorts of failure.
- My personal judgement (more of an instinct born of experience, really) is there is some momentum of experimentation in business and beyond with ‘nature positive’ configurations. But this is growth in number of scale from a low base.
- Therefore, successful transformation is possible, but far from inevitable at this moment.
- If I think that, then presumably the hard-bitten, commercially-aware business leaders – who are facing daily pressures for returns and certainties – are far from convinced. And, if you were a savvy and successful executive, you would be thinking: ‘how can I make this someone else’s problem?’. Because, delivering in the short-term, and pushing risk onto others really is the most viable way to climb the corporate greasy pole. The easiest way to make it someone else’s problem is to push it in to the future by slowing down change.
- Which takes you to the politics. Without overwhelming and unshakeable political commitment, it is hard to see why a corporate CEO wouldn’t be lobbying the busines equivalent of St Augustine: ‘Government, make me sustainable, but not yet’.
Should we be requiring at the ‘everything good’ or ‘above the critical thresholds’?
- Early on, the report argues that business “needs to align with a nature positive and gender equality mission that uses only renewable energy, restores biodiversity, aims for gender equal employment practices and moves towards a fully circular economy”.
- That’s a lot of different things to align with.
- There is a risk to having the ‘all win-win, all the time’ world as the only definition of success.
- in the last main chapter of ‘Facing Up to Climate Reality’, John Foster argues that pursuing the pure Utopia only risks missing out on improvements which can really be delivered.
- What if the price of requiring business to align with “a nature positive and gender equality mission that uses only renewable energy, restores biodiversity, aims for gender equal employment practices and moves towards a fully circular economy” is that businesses don’t do any of it? Because they believe it is too hard. (Far easier to slow down change, and extract rents from your incumbent position.)
- What if instead we spoke of maintaining certain critical thresholds, chosen because of the dire consequences of cross them? And that anything better than that is a bonus? And that a business should find where it can make the best contribution to keeping well above one or more of those critical thresholds, in ways that don’t undermine any of the others?
- A lower test, less Utopian and perfect. But easier to commit to. More realistic.